New knowledge isn't worth very much if no one subsequently exploits it for whatever purpose, writes Dick Ahlstrom

Has Ireland got an innovation economy at the moment? The simple answer, despite all the hype, is no. The good news is: we're working on it.

The Government has a stated goal to create a knowledge economy here, one based on creative research and innovation. It spent €2.54 billion in the last National Development Plan and has earmarked €3.2 billion in the new plan to achieve this goal.

A large fraction of this is flowing into our third-level institutions, where a substantial amount of blue skies and applied research is underway. The funding has delivered new buildings, the latest equipment, as well as the students, post doctorates and academic researchers needed to create new knowledge.

Recent studies have highlighted a problem however when it comes to commercialising these discoveries.

While the universities and institutes are busy making discoveries and getting research studies published in learned journals, we seem to be remiss in finding ways to link up the labs and the companies that can commercialise the research findings.

We also trail behind other knowledge economies in our ability to turn discoveries into marketable products protected by patent. If Ireland is to reap the benefit of the national investment in research, we have to improve our performance in this area.

The Forfás report From research to the marketplace, patent registration and technology transfer in Ireland highlighted the apparently simple steps that develop an idea into intellectual property, and on through the technology transfer process before becoming a saleable product. In this scenario intellectual property (IP) equates to a patent, a parcel of new knowledge fully protected by law to ensure the commercial benefits from discoveries in the lab return to reward those who made them.

The report, conducted by Circa Group Europe, unfortunately found fault with the IP and technology transfer elements of this equation as exercised here. It pointed out that new knowledge isn't worth very much if no one subsequently exploits it for whatever purpose.

"Maintaining a strong science base and sustained investment in research and technological development, although they are important components of a modern competitive economy, are not ends in themselves," the report states.

"The knowledge that is created also needs to be exploited for the benefit of society - to enhance the competitiveness of industry, to promote growth, employment and higher living standards, and to improve the quality of life in terms of health and environment. Consequently, there is a clear need for policy to address any issues which might inhibit the exploitation of new technology and limit its contribution to overall national development."

It points out that the level of patent registration gives only a partial picture of the level of innovation in an economy, but it is a useful comparative that provides an insight into our ability to make use of new knowledge and our capacity for innovation.

While the development, commercialisation and exploitation of intellectual property is a major development path of the future, "Ireland has a long way to go", the Circa report says. We have only begun to develop our innovative capacity, and our level of investment in research and registration of patents is still low by international standards. In terms of patents filed per million of population at the European Patents Office (EPO), Ireland is well down the list at 70 patents, behind the UK at 113, but ahead of Italy at 67, Spain at 21, Greece at six and Portugal at four.

The Circa study found that the overall levels of patent filing and patent granting in Ireland and by Ireland in Europe and in the US are low in comparison to similar sized EU economies. Denmark, Austria and Finland are the European countries that are nearest to Ireland in terms of population size and industrial structure.

When patenting activity in the technology sectors of Ireland and these four countries is compared, Denmark and Finland come out ahead of Austria and Ireland. In 2001, Finland made 1,571 patent applications to the EPO and 340 were granted. In the same year Ireland applied for 257 and received 53.

This is a straight numbers game but the report also identified a "culture clash" between research practitioners at third level and businesses seeking to transfer knowledge into new commercial products.

"In general, industry views the process of IP licensing from universities and research institutions negatively," it says.

"Some companies have tried to license from institutions but have given up in frustration. Too often business and institutional cultures clash because institutions are not attuned to the needs of business."

Academic researchers would view this as a two-way street, so both sides will have to learn to adjust and live with one another if we are to achieve a knowledge economy. This will mean making it easier for the two to talk to one another and efforts are underway to bring this about.